Fiducian Investment Management Services Limited (FIMS) has been ordered to pay a $7.3 million penalty for breaching its duty to act with care and diligence as a responsible entity and engaging in conduct liable to mislead the public.
The Supreme Court of New South Wales found on 11 August 2026, that FIMS had failed to act in accordance with its duty of care and diligence as the responsible entity of the Diversified Social Aspirations Fund (Fund). The Court also found that FIMS made statements that were liable to mislead the public about the ‘ethical’ or ‘socially responsible’ investment objectives of the Fund (ESG Statements) and that it would monitor the Fund to ensure its investments were consistent with the ESG Statements.
The proceeding related to FIMS’ operation of the Fund, which was established to meet client demand for a ‘socially responsible’ or ‘ethical’ investment option. The Fund invested solely through several underlying funds (Underlying Funds) which, between October 2019 and May 2024, held investments in companies that, among other things, derived revenue from fossil fuels.
The Fund’s Product Disclosure Statement (PDS), which was issued six times between October 2019 and May 2024, stated that the Fund would invest in companies “that aim to be positive for society and for the environment and aim to avoid investments in harmful activities”. The PDS also specified a number of industries or activities that the Fund would avoid investing in and stated that FIMS would routinely monitor the portfolio exposure, operations and performance of the Fund.
The Court found that FIMS did not have reasonable grounds to make the ESG Statements.
The Court also found governance and oversight failures on FIMS’s part, including that it failed to:
- adequately monitor the Fund’s underlying investments for alignment with the ESG Statements
- review the investment strategies of the Underlying Funds
- change its underlying investments, or
- cause the Fund’s stated investment objectives to be amended to align with its actual investments.
Investor concerns about the Fund's holdings had been raised from at least 2019, yet FIMS failed to appropriately amend or qualify its ESG Statements.
ASIC Chair Sarah Court said investors should be able to trust sustainability-related claims made by investment managers.
'More Australians are seeking investments that align with their ethical, environmental and social values. Those investors are entitled to accurate information about where their money is invested.
'This case is a reminder that ESG claims must be backed by robust systems, oversight and governance. Fund managers and responsible entities must comply with their duties and they cannot make sustainability claims that are not supported in practice.'
The Court accepted that:
- retail investors were denied the opportunity to make an informed choice between the Fund and other ESG funds available in the market, and
- FIMS's contravening conduct eroded confidence in the financial system and consumers' trust in statements made by responsible entities.
This is ASIC's fourth greenwashing civil penalty outcome and the first against the operator of a managed fund for failures in governance, compliance and oversight of ESG claims. Importantly, this case is the first greenwashing-related civil penalty outcome in relation to a responsible entity’s failure to uphold its duty to act with care and diligence.
Download
Background
FIMS is a wholly-owned subsidiary of listed entity Fiducian Group Limited and was the Trustee and responsible entity of the Fund.
The Fund, which was opened in 2015, was established by FIMS in response to demand for an “ethical” or “socially responsible” option for investors. It was closed in 2024.
ASIC commenced proceedings against FIMS in 2025. FIMS admitted that it failed to discharge its duties as a responsible entity and contravened provisions prohibiting a person from making false or misleading representations.
In ASIC’s previous greenwashing outcomes, a penalty of $11.3 million was obtained against Mercer Superannuation (24-173MR), $12.9 million against Vanguard Investments Australia (24-213MR), and $10.5 million against Active Super (25-042MR).
ASIC’s Information Sheet 271 How to avoid greenwashing when offering or promoting sustainability-related products (INFO 271) provides information for responsible entities of managed funds and super fund trustees about how to avoid greenwashing when offering or promoting sustainability-related or ethical products and investments.
ASIC’s Report 791 ASIC’s recent greenwashing interventions outlines ASIC regulatory interventions made between 1 April 2023 and 30 June 2024 in relation to greenwashing concerns.
ASIC’s Moneysmart website has a range of tools and resources to help people understand money and how to manage it. Find out more about what ESG investing is and how it works.